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Jérôme Kerviel’s Giant Fine

The French legal system prides itself on its tradition of Cartesian logic, so it was probably too much to expect a panel of three Parisian judges to embrace the idea of Jérôme Kerviel as a modern-day Robin Hood. This week Kerviel was pronounced guilty of breach of trust, forgery, and entering false data for his role in a rogue trading scandal that cost his employer, the French bank Société Générale, $6.7 billion in losses.

But the photogenic young trader from a humble Breton background tapped into another deep French tradition, which is popular mistrust of banks and the élite grands-écoles graduates who run them. Kerviel never denied what he did, which was to bet on stock futures with massive unauthorized trades. The issue was why: because he wanted to earn money for the bank; because earning huge profits was the only way he could rise through the bank’s rigid class structure; because his immediate superiors tacitly or overtly encouraged him as long as he was making profits. Kerviel himself made no money from his scheme. His profits, while they lasted, went to the bank. So, of course, did the losses.

Kerviel was sentenced to five years in prison (two of them suspended). Predictably, he was barred for life from working in the financial industry. But there were gasps from spectators in the courtroom when he was fined $6.7 billion, the harshest financial penalty ever imposed in France. Given that Kerviel has no hope of ever paying it, it seemed to be a symbolic pronouncement that Société Générale, a company considered by France to be a “national champion,” was blameless.